Imatron prepares to expand EBT scanner sales overseas

Basking in the glow of rising U.S. sales of its electron-beam tomography scanners, Imatron is moving to increase business in Japan, China, Germany, and the Middle East. The move into foreign markets with Imatron sales and service staff is part of a global strategy to expand EBT scanner sales into relatively untouched markets while continuing to grow existing ones.

Sales staff dedicated to these foreign markets is being hired, according to company president Terry Ross. This staff will be native to the areas, speak the languages, and understand the nuances of their markets. Imatron will provide the service in all these countries except Japan, where Imatron Japan—which is allowed to use the Imatron name but is not owned by the American-based company—will service EBTs.

Of these new markets, China may represent the biggest opportunity, Ross said. Even without a dedicated sales staff in the country, Imatron has placed five EBT scanners at Chinese sites over the past several years.

“They accept the technology and how it is used very well,” Ross said. “It’s a huge opportunity when you look at the population. The market is opening to American business, and because there has been little penetration by Siemens, GE, Toshiba, and the other big vendors, there is no inclination (there) to buy from these companies rather than Imatron.”

Japan represents another major opportunity, as public health interests in that country have begun to focus more on heart disease. Efforts by Imatron Japan have already led to the installation of more than 20 EBTs.

Huge market seen in GermanySimilarly, Germany represents a huge cardiology market, Ross said. Although this is Siemens’ backyard, Ross has high hopes for sales. He believes the German competitor, which has begun selling a mechanical multislice CT scanner for heart applications, is more attuned to radiology than cardiology. Imatron has, in fact, placed 10 EBTs in Germany, according to Ross. Five of these are at prestigious locations.

“We’ve had early success there and want to leverage that now,” he said. “Germans understand the speed advantages of EBT versus mechanical scanners when imaging the heart.”

This strategic attack in foreign markets is being financed by the bundle of money the company has been accumulating. In the past year, cash and cash equivalents have grown from $1.4 million to $11.2 million. Booming sales have been feeding the war chest.

In 1999, the company shipped 19 EBTs, almost double the previous year’s number and eight times as many scanners as in 1997. Imatron expects to sell more than 30 units worldwide this year.

Among those 30 will be two mobile units. Assembly of one in a 40-foot Calumet Coach began in June. Assembly of the other is scheduled to begin in September. Both have been sold to mobile route operators and should be on the street before the end of the year.

The two scanners, dubbed “beta one” and “beta two,” are intended as much to prove that the concept of mobile EBT scanning is viable as they are to broaden the product offerings of the company.

“We’re going to make sure we have hardened the scanner properly before more mobiles are built,” Ross said. “There are no moving parts, so we do not perceive this will be difficult to do, but we want to make sure we do it right.”

The company hopes to formally launch a mobile EBT program later this year at the annual meetings of the American Heart Association and RSNA.

Company sells HeartScan subsidiaryAlong with these initiatives, Imatron has sought to cut liabilities. Chief among these has been the sale of its HeartScan centers. Originally these centers were established to generate revenue when Imatron was in its strategic alliance with Siemens Medical Systems a decade ago. Siemens held all distribution rights to Imatron products at the time, but Imatron was allowed to sell scanners to itself, ergo the establishment through a wholly owned subsidiary, HeartScan, of outpatient clinics built entirely around electron-beam tomography. This move, however, had long-term repercussions.

“We came to be viewed as a vendor marketing to the public and this created two problems,” Ross said. “Politically, medicolegal bodies like the ACC (American College of Cardiology) didn’t like vendors marketing to the public. From a business sense, prospective customers in a metropolitan area with a HeartScan center questioned whether they would get the best break on technology and service.”

The company’s four HeartScan centers in San Francisco, Pittsburgh, Houston, and Washington, DC, have been sold, but the stigma remains, according to Ross. But this perception will fade over time, he said, as the company builds a reputation as a pure vendor of equipment.

Imatron has been aggressively building this reputation. In less than two years, the company’s sales force has grown from just four to 33. These salespeople have focused on cardiologists who appreciate the ability of EBT to stop the motion of the heart to precisely measure calcium in the coronary arteries as a predictor of risk for future heart attacks.

The company’s opportunities will soon expand as EBT is marketed as an adjunct to cardiac cath. The approach will be to position EBT as the means for making coronary angiograms of low-risk heart patients, an application for which the FDA has already cleared the company to market its system. Imatron also hopes to reach beyond its traditional base in cardiology, marketing EBT as a means to scan the lung for cancer and to do virtual colonography.

“The lung scanning and EBA (electron-beam angiography) markets are each as big as the calcium-scoring market,” Ross said. “So there are now three huge funnels that can feed scanner sales today and a fourth driver, virtual colonography, is just around the corner.”

Imatron executives are confident of their ability to sell EBTs for new applications. The company laid the groundwork for coronary calcium scoring as a tool in the cardiac assessment of asymptomatic patients. Only after Imatron had done so did vendors of conventional CT begin building and selling CT scanners with calcium-scoring capability.

“We moved the market. We made this an issue,” Ross said. “I think it is pretty amazing that this little company caused these monsters to respond.”

The question now is whether Imatron can keep doing it.